Global Head of Business Advisory, Reporting & Engagement, ABN AMRO
It is difficult to imagine today that only in 2015, creating long-term value – let alone measuring, reporting and steering on it – was a revolutionary concept in the financial industry. A world that was used to measuring business performance in terms of profit and loss only. That year, we published our first integrated report. It was the outcome of a shift in mindset and how we viewed our role as a bank, and a growing awareness of the power integrated thinking and reporting has in that mindset shift.
We have come a long way since then. Our 2017 report was the first in the world to receive assurance from an assurance provider (EY) based on the International <IR> Framework. In 2018, we published our first Impact Report, which highlights the value we create in terms of our impact on all capitals, for all stakeholders. Not in isolation, but as part of our integrated report and firmly rooted in integrated thinking as a means to an end – the goal is to create value going forward. In order to do so, we need to have an understanding of the kind of long-term value we – as a bank – are looking to create, and for whom.
These days, we seek to generate value for multiple internal and external stakeholders. This is an ongoing process that is discussed at senior management level and requires the approval of our Executive Committee. We regularly monitor the progress we’ve made in delivering on our value-creating topics and whether they are still relevant.
The International <IR> Framework became our compass
When it comes to measuring value, corporate reporting tends to focus on financial profit for shareholders. But how do you quantify social and environmental impact? Over the years, we found that there was no single standard. The options were vast and we needed guidance, a clearly defined framework. After careful research, we opted for the framework of the IIRC because of its simplicity and scope.
Integrated reporting required us to integrate the principles of the <IR> Framework in our annual report, which at the time was mainly guided by the International Financial Reporting Standards (IFRS). Two different reporting frameworks had to work together and complement each other. Ultimately, we got our Executive Committee and finance team on board and we have had their backing ever since. And so the <IR> Framework became our compass for reporting and has led our organization to a greater depth of integrated thinking.
Quantifying our impact has provided us with insight into the value we create. This comprehensive, data-driven information has given senior management the tool they need to make operating decisions and to steer on impact, based on multi-capitals and stakeholders. While our goal is to achieve positive impact, we should not close our eyes to the fact that we, like any other company, also have negative impacts. The challenge now is to maximize positive impact while minimising the negative impact of our activities.
We have made great strides, but we’re not there yet. The next step is to further develop and embed integrated thinking within ABN AMRO. To include value creation and impact measuring in the way we run the company. The experiences and knowledge that we have gained from our reporting journey are essential in that process. At the same time, it is important that we join forces with other companies to continuously develop the concept of integrated thinking and reporting together.